Revenues from streaming services like Netflix and Amazon are predicted to overtake UK theatrical box office by 2021, according to a new report from PwC. The consultancy expects that internet on-demand video will grow by more than 30% in the next few years, to hit at least £1.4B by 2021, exceeding spend at turnstiles.
While UK box office in 2016 was the 2nd highest on record at £1.227B, admissions showed a 2% dip. However, the report also forecasts growth in admissions, from 172M last year to 179M in 2021, and a 9.6% increase in screen count to more than 4,500, The Guardian notes.
Netflix and Amazon are very popular in the UK, attracting millions of viewers with originals like The Crown and The Grand Tour. Four of the top 10 SVOD programs in 2015 were original productions, “showing that for consumers, fresh, high quality, content is king,” says PwC’s Phil Stokes.
Still, while he also added, “Demand for internet video shows no signs of slowing down,” he stopped short of sounding a full death knell for multiplexes.
The UK industry will remain “pretty healthy,” Stokes told The Guardian, pointing to the box office of such 2016 pics as Rogue One: A Star Wars Story (No.1/£64.3M) and Fantastic Beasts And Where To Find Them (No. 2/£54.3M). Both of those titles, along with the No. 3 movie (Bridget Jones’s Baby), were made in the UK.
PwC, meanwhile, is also forecasting a “terminal decline” for DVD and Blu-ray sales, from £1.22B in 2016 to just £533M by 2021.
The forecasts come at the same time as exhibitors in the U.S. are having private discussions with the Hollywood studios to determine terms for a premium video on demand (PVOD) window. Last week, National Association of Theater Owners’ Patrick Corcoran said the talks have been “fruitful.” But MoffettNathanson Research’s Robert Fishman warned that movie theaters collectively could lose $380M a year in profits from the introduction of PVOD, plus about $558M from Netflix’s movie-making efforts.
Fishman expects Universal, Warner Bros or Fox to become frustrated by the slow pace of negotiations and potentially move forward with their own PVOD press release by the end of this year. Such plans are not yet openly being discussed in the UK, although Netflix’s ambitious goals to produce 40 films a year do extend to Britain where a strict windowing system has stirred debate.